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FCPA Exceptions
There are three exceptions to the Foreign Corrupt Practices Act
Payments for routine government actions
Payments which expedite or secure the performance of a routine governmental action by a foreign official, political party or party official are not prohibited.
Payments which are lawful under foreign law
A payment is not prohibited if it is lawful under the laws and regulations of the relevant foreign country.
Reasonable and bona-fide expenditures
A payment which is a reasonable and bona fide expenditure and directly related to the promotion, demonstration or explanation of products or services or directly related to the execution or performance of a contract is not prohibited.
In the News“On December 15, 2008, the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and Siemens AG (Siemens) announced that they had reached agreements with respect to violations of the Foreign Corrupt Practices Act (FCPA) by Siemens and its subsidiaries. Pursuant to these agreements, Siemens pleaded guilty to two counts of violating the books and records and internal controls provisions of the FCPA. Siemens subsidiaries in Argentina (Siemens Argentina), Bangladesh (Siemens Bangladesh), and Venezuela (Siemens Venezuela) each pleaded guilty to separate one-count informations charging conspiracy to violate the anti-bribery and books and records provisions of the FCPA. In connection with these guilty pleas Siemens agreed to pay a criminal fine of approximately $448.5 million and each of the subsidiaries agreed to pay criminal fines of $500,000 for a combined total of $450 million. In connection with the SEC agreement, Siemens agreed to disgorge profits of approximately $350,000 to resolve civil FCPA charges. The $800 million combined total is the largest monetary sanction ever imposed in an FCPA case. In addition to the monetary penalties, Siemens must retain an independent compliance monitor for four years to “oversee the continued implementation and maintenance of a robust compliance program,” and continue cooperating fully with DOJ in its ongoing investigations of corrupt payments by company employees and agents. The criminal and civil charges stem from admissions by Siemens that it had paid approximately $1.36 billion through various mechanisms for unknown purposes and corrupt payments to foreign officials.” |
